MANILA, April 28, 2014 (AFP) - The Philippines and the United States signed an agreement Monday to allow a bigger US military presence on Filipino territory, hours ahead of a visit to Manila by US President Barack Obama.

Philippine Defence Minister Voltaire Gazmin and US ambassador Philip Goldberg signed the 10-year pact, which is seen as another element Neverthelessof Obama's effort to focus US military and economic attention more heavily on Asia.

Obama said the deal would see more US troops rotate through the Philippines for joint military training exercises, but emphasised there would be no return of permanent American bases.

"Greater cooperation between American and Filipino forces would enhance our ability to train, exercise, and operate with each other and respond even faster to a range of challenges," Obama said in a written response to questions by local television network ABS-CBN ahead of his visit.

The deal announced on Monday is only a framework agreement, with the details - such as how many US troops will rotate through the Philippines and when - to be negotiated and announced later.

Obama was due to arrive in the Philippines from Malaysia on Monday afternoon for a two-day visit, the final leg of an Asian trip that also took him to Japan and South Korea.

The United States and the Philippines are already long-time allies bound by a mutual defence pact, and engage in regular war games that see thousands of US troops and state-of-the-art American military hardware brought to the Philippines.

The Philippines had been eager for an agreement to expand the arrangement to boost its weak military capabilities and emphasise its close ties to the United States, at a time of deep tensions with China over competing claims to parts of the South China Sea.

China claims most of the South China Sea, even waters close to the Philippines and other countries in the region.

Brunei, Malaysia and Vietnam, as well as Taiwan, also have overlapping claims to the sea.

Obama reassures Philippines

As tensions over the South China Sea have heated up, the United States has sought to strike a balanced strategy by seeking to reassure its allies in Asia while emphasising to China it takes no sides on the dispute.

In his comments to ABS-CBN, Obama again emphasised the United States remained deeply committed to supporting the Philippines, a former US colony, referring to the two nations' 1951 mutual defence treaty.

"We've pledged ourselves to our common defence for more than six decades. Our treaty obligations are iron-clad," Obama said.

"The United States stands by its allies, in good times and in bad. In fact, one of the main purposes of my visit will be to reaffirm our treaty commitments to the Philippines and to make it clear that just as we've relied on each other in the past, we can count on each other today."

Nevertheless, the mutual defence pact does not specifically state that the United States must come to the Philippines' defence over remote islets and reefs in the South China Sea.

Obama made no mention of the hotspots when referring to the mutual defence pact, but did again call on China to not use intimidatory tactics to assert its claims.

"I've been clear and consistent in stressing that the United States and China need to support efforts among claimants to peacefully manage and resolve maritime and territorial issue through dialogue, not intimidation, including in the South China Sea," the US leader said.

Obama said the deal would give US forces "greater access to Filipino facilities, airfields and ports, which would remain under the control of the Philippines".

"US forces would not be based in the Philippines. Instead, they would rotate through for joint training and exercises, as some US forces already do."

Filipino officials have previously said the deal would also allow the United States to store equipment that could be used to mobilise American forces faster - particularly in cases of natural disasters.

The Philippines hosted two of the largest overseas US military bases until 1992, when the Filipino Senate voted to end their lease amid growing anti-US sentiment.

Philippine President Benigno Aquino has led a warm re-embrace of the United States in recent years, insisting that greater US military support is needed to fend off China's actions. - AFP

The tax authorities are stepping up checks on businesses to nab and deter Goods and Services Tax (GST) cheats.

GST is now the No. 2 revenue-earner for the government after corporate income tax, and netted S$9bil (RM23.4bil) in the financial year ending March 31 last year, up from S$2.2bil (RM5.7bil) 10 years earlier.

Through regular audits alone, the Inland Revenue Authority of Singapore (Iras) has recovered an average of S$110mil (RM286mil) annually in the past five years from businesses that were ignorant of, or negligent in complying with GST rules.

Investigations of 130 suspicious cases over the past five years resulted in 20 people being prosecuted and 12 sent to jail. Iras also recovered S$37.6mil (RM97.8mil) from these cheats.

Assistant commissioner of the GST division Sabina Cheong has a team of about 120 auditors checking on some 3,000 GST-registered businesses a year.

They pass suspicious cases to Loh's team, which has upped the number of GST fraud investigators from three in 2005 to 10 now.

Cheong added: "Some people not only try to cheat by not paying GST, but they even try to cheat and get money out of the system."

Many cheat by submitting fake or inflated claims.

GST-registered businesses can offset the GST they pay for their purchases, known as input tax, against the GST they collect from the sales of their products, or output tax.

If a business incurs more GST on purchases than it collects from sales, it can claim the difference as a refund from Iras.

Some cheat by claiming that they spent much more on their purchases than they actually did, in order to get a refund.

But when asked for proof, they claim their records were eaten by termites, destroyed by floods or fire, or lost while moving office, Cheong said.

One man in his 30s set up a shell company, claiming to deal in computer parts. In 2010, he applied to register his firm for GST even though he did not have to as only businesses with an annual taxable turnover of over S$1mil (RM2.6mil) must do so.

He filed his first fictitious returns to claim GST refunds of about S$36,000 (RM93,650), when there were no business transactions at all.

When Iras asked for supporting documents, he forged two purchase invoices.

Pressed further, he claimed that a friend was the one behind the scam, but he could not provide any details about the friend.

In 2012, he was fined close to S$300,000 (RM780,421) and jailed for one and a half months.

Others run foul of the law by collecting GST even though they are not registered to do so. Last year alone, Iras found about 100 companies collecting GST unlawfully.

They include a 60-year-old businessman who collected close to S$20,000 (RM52,028) in GST from his clients. He was selling security and fire-fighting equipment, but his was not a GST-registered business. He used the money to pay credit card and other bills.

At the opposite end, there are businesses that should be registered for GST because their annual taxable turnover exceeds S$1mil (RM2.6mil) but they fail to do so, and that flouts the law too.

Lam Kok Shang, head of indirect tax at KPMG in Singapore, said that clients can check the Iras website to see if a business is GST-registered, so it is not easy to fool people into paying GST if a business is not authorised to collect it.

He felt that most businesses fail to register for GST as they are not familiar with GST rules and not because they are out to cheat. — The Straits Times / Asia News Network